The Coal Trader

Russell Vale Colliery to Close Despite Recent Restart

Workers at the Russell Vale colliery in New South Wales, Australia, have been dealt a blow with the news of its closure by operator Wollongong Resources. The mine, which only restarted operations in 2021 after a period of care and maintenance, has faced recent challenges in the form of underground ignitions and regulatory scrutiny.

Closure Decision:

  • Wollongong Resources informed its 150 employees via email and an open-air meeting on February 5th.
  • The company cited “ongoing regulatory risk and lack of support” as the reason for closure, despite claiming the mine was safe to operate.
  • This decision comes after the NSW Resources Regulator issued a prohibition order halting production at Russell Vale on January 19th due to safety concerns.

Regulatory Concerns:

  • The regulator expressed concerns about “frictional ignition events” – incidents that can lead to coal dust explosions – which occurred at the mine over the past year.
  • The regulator has been working closely with Wollongong Resources since a similar event in April 2022 and had increased its compliance and enforcement activities at the mine.
  • The safety bulletin issued by the regulator in December emphasized the risks associated with such events and stressed the importance of appropriate preventative measures.

Mine Operations and Ownership:

  • Russell Vale, part of the NSW Southern Coalfield, produced 0.15 million tonnes of run-of-mine coal in the last quarter of 2023 but reported an operating loss.
  • Wollongong Resources, owned 60.38% by Indian steel giant Jindal Steel and Power (JSP), also operates the Wongawilli mine, currently under care and maintenance.
  • JSP acquired both mines in 2014 and sells the majority of Russell Vale’s export metallurgical coal to itself.

Expansion Plans and History:

  • In December 2020, approval was granted to increase Russell Vale’s production capacity to 3.7 million tonnes per year over 20 years, creating additional jobs.
  • This expansion project, worth A$250 million, never came to fruition.
  • Production at Russell Vale was previously halted in 2015 and restarted in 2021, mirroring a similar pattern at the Wongawilli mine.

Impact and Next Steps:

  • The closure of Russell Vale will affect 150 employees and represents a significant blow to the local community.
  • Unions have expressed disappointment and are seeking support for affected workers.
  • The future of the Wongawilli mine remains uncertain, remaining under care and maintenance for now.

This news highlights the complex challenges faced by the Australian coal industry, balancing production with safety concerns and regulatory scrutiny.

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